Consider Choosing Layaway Over Credit When Holiday Shopping

It's the beginning of October. So naturally all the stores are putting out their Christmas decorations already.

It's a little hard to get into the Christmas spirit when I'm trying to plan my Halloween. But what's just plain scary is the nagging thought of the money I'm going to have to drop on presents for friends and family come December. Even scarier, the thought that I might not be able to afford some gifts this year.

With the large majority of Americans on some kind of budget, I don't think I'm the only one. Fortunately, there's a way to ease - if not eliminate - shopping pains. The gifts we can afford don't depend just on how much we have to spend, but on the way we spend. Done right, shoppers can save money - and that savings can be stretched to buy more and better presents (not to mention to help pay the bills).

Most folks nowadays rely on credit cards to cover their Christmas splurges. I probably don't need to remind you that, while plastic is convenient, it's not cheap. Let's say you buy $500 worth of gifts on your holiday shopping spree. If you pay about $25 towards your debt each month, it would take you two years and a total of $600 - a whole hundred dollars more - to pay it off, according to this Chicago news story.

The surest way to avoid the problem is to pay with cash. With cash, there's no interest and no possibility of spending more than you have. But if your budget simply won't allow it, there's another option to consider: layaway. It's kind of like the opposite of credit. Rather than taking your purchase home today and paying tomorrow, you pay bit by bit for a couple months and pick up your item when it's paid off. There's no interest, usually just a small flat fee (maybe $5 or so) and you can't damage your credit score, even if you cancel.

Or how about putting a set amount of money aside for presents? Some stores allow you to open up "Christmas accounts" that interest, as much as 3 percent. If you sign up now, you can get your money - and your interest earnings - by mid-November.

Of course, every payment method has its pros and cons. But whatever your strategy, remember - it's the thought that counts. If you're drowning in debt, don't stress over how to please everyone this holiday season. Instead, make the decision to conquer your debts once and for all so this is the last time you'll have to worry about your bills - whether they're for Christmas presents, your credit card or your mortgage payment. Bankruptcy is a surefire way to reduce your non-mortgage debts - like credit card debt, for instance - freeing up more cash for the other important things in life.

To find a bankruptcy plan that's right for you, just sign up for a complimentary personal debt analysis with a Chicago bankruptcy lawyer. It's free, there are no strings attached and it can get you started on the path to financial freedom. It's enough to put you in the Christmas spirit in October.

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